Gov’t makes plans for July debt issue

Return to markets will be with a 3-or 7-year bond before the start of the troika’s next major inspection By Sotiris Nikas

The Finance Ministry is examining plans for a three- or seven-year bond issue by the end of next month, which is said to have no connection to the implementation of the prior actions required for the disbursement of the bailout sub-tranches due this summer.

Sources have told Kathimerini that the ministry is processing various plans concerning the new bond issue, with the likeliest being for an issue in July. A preliminary discussion has already taken place with the representatives of the country’s creditors and their response is said to have been neither positive nor negative.

Reuters also ran a report on Tuesday on a new Greek bond issue next month, after which government spokeswoman Sofia Voultepsi stated that “neither the government’s decision to respond to the prior actions required for the funding of the country to continue smoothly nor the positive recent developments in the economy justify any actions such as those heralded by a report published [on Tuesday] that cites a statement by a ‘senior Finance Ministry official.’ Greece’s next return to the markets will happen whenever it is required, but by choice and not necessity.”

The troika of inspectors from the European Commission, European Central Bank and International Monetary Fund are set to return to Athens on July 8 for a brief intermediary monitoring visit. Provided the mood regarding the Greek economy on international markets does not change, the government will likely proceed with the new bond issue at end-July.

The troika’s main inspection will begin in late August, with the aim of covering a number of significant issues, and could last for months or even until the end of the year. It will determine whether any new measures will be required for next year, whether the country’s debt can be lightened further and whether a new bailout package will be needed.

Consequently, if there is no bond issue by the end of August, it will be very difficult to schedule for the fall or winter while crucial negotiations are ongoing, as a climate of uncertainty over an agreement between Athens and the troika could create concern in the markets, which is not the case today.